American Construction Industry Has No Prospect for Significant Growth until 2011

The American Institute of Steel Construction (AISC), headquartered in Chicago, is a not-for-profit technical institute and trade association established in 1921 to serve the structural steel design community and construction industry in the United States. Current market share for structural steel in the non-residential marketplace is 59%, based on square footage of construction starts.

This September 24 marks the second annual day dedicated to the America structural steel industry. During the first ever SteelDay last fall, at more than 170 different locations across the nation, steel fabricators, mills, service centers, galvanizers, HSS producers, bender-rollers, and others opened their facilities, jobsites, and offices, offering free tours and inviting the AEC community and general public to see how the structural industry contributes to building America. It was a massive event that provided tremendous exposure for the structural steel industry.

John P. Cross, PE, Vice President of American Institute of Steel Construction talked to TURKFAMERICA about the structural steel industry.

Last year will forever be known for the collapse of the construction market. Could you tell us about the American structural steel industry’s expectations for 2010? American Institute of Steel Construction (AISC) only represents the structural steel segment of the steel market. The outlook for construction activity and therefore the demand for structural steel for 2010 is similar to the demand that was experienced in 2009. Clearly the construction industry in the US is bouncing along the bottom of the recession with no prospect for significant growth until 2011. We anticipate the volume of construction starts in the US in the non-residential sector to be down 2% to 5% compared to 2009 with a small increase (2% to 4%) in industrial construction.How has the financial crisis affected the steel industry? Do you think the industry will recover? Obviously for the structural steel market the downturn in construction has reduced demand and lowered the utilization rates of domestic structural steel mills. Likewise, structural steel fabricators have faced a significant downturn in orders and increased competition. But in the face of these challenges, both mills and fabricators remain viable and well positioned to supply domestic demand in the decades to come.

What is the biggest obstacle the industry has to overcome in the near future? The largest obstacle facing the US structural steel market in the near future is a loosening of credit in the US for developers to again begin to invest in construction projects. Until funding becomes available, construction volumes will remain low, creating downward pressure on the structural steel demand.

Turkey is the one of the leading steel producers and Turkish investors are seeking business opportunity in the United States. What would be your advice to them if they wish to invest or to export their products to the the US? My advice would be to focus on and invest in your domestic marketplace and increase the demand for structural steel within Turkey. US market share for structural steel is near 60% of the construction market on a square footage basis. The significant opportunity that exists for the Turkish structural steel industry is not in the export of material, but rather driving demand by increasing your domestic market share. The most efficient manner of increasing market share is to engage structural steel professionals early in the design life of structures to influence and optimize the project for structural steel.

What did the industry learn from the recession? We are part of a cyclical segment of the economy that goes through natural periods of growth and natural periods of contraction. Successful firms manage with a long term perspective that allows them to weather these cycles.

What is the the structural steel industry’s share of the construction market and what does your organization do to increase it? Current market share for structural steel in the non-residential marketplace is 59%, based on square footage of construction starts. We employ a staff of regional engineers throughout the United States who work directly with owners, developers, architects and structural engineers promoting the benefits of structural steel. We support their efforts through the services of the AISC Steel Solutions Center, which provides both conceptual approaches for projects using structural steel as well as answers to technical questions relating to structural steel on a complementary basis. In addition we support the marketplace with current design specifications and tools for the use of structural steel.

AISC is an almost 100-year-old organization. How do you see the industry's future? Will the structural steel industry become more important? Structural steel is a highly recycled product with a low environmental footprint that will meet the needs of construction on a sustainable basis for the foreseeable future.